Market Matters Blog 03/19 10:40
Waiting for Opening Day in Upper Mississippi River Twin Cities District
DDG Prices Firm
Ag-Related Truckers Get Second Reprieve from Electronic Logging Device Mandate
Time Running Out for Next Food Safety Modernization Act Compliance Dates
DDG Prices Higher
High Water Still Stalling Barge Traffic
DDG Prices Higher
Flooding Halts Shipping on Illinois River, Creates Havoc on Mississippi
DDG Prices Steady
DDG Prices Remain Firm on Average
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Waiting for Opening Day in Upper Mississippi River Twin Cities District
Similar to the excitement surrounding the spring home opener for your
favorite professional baseball team, river terminals in the Upper Mississippi
River (UMR) are also excited to see the sleeping river wake up after a long
winter and once again fill up with barges. It's also good news for grain and
feed shippers, as it provides another -- and sometimes cheaper -- route to ship
commodities.
Shippers will have to contain their excitement for a while longer this
spring, though. The first barge has yet to make its way through Lake Pepin to
get to St. Paul, Minnesota, because the ice in the middle of the lake was still
too thick on March 14, 2018, to allow tows to pass through.
Lake Pepin, located 60 miles downriver from St. Paul, Minnesota, is the
widest naturally occurring part of the Mississippi River. Pepin is the last
roadblock for barges waiting to come upriver to open the spring shipping season
in the Twin Cities District. Tows prefer the ice thickness to be 15 inches or
less before attempting to move through the middle of the lake with barges as
they head upriver.
The U.S. Army Corps of Engineers St. Paul District considers the first tow
to arrive at Lock and Dam 2 as the "unofficial" start of the navigation season
because it means all of its locks are accessible to commercial and recreational
vessels. According to the Corps, the earliest date for an up-bound tow to reach
Lock and Dam 2 was March 4 in 1983, 1984 and 2000. The average start date of
the navigation season is March 22. In 2017, the season opened early on March 9
when the Motor Vehicle (MV) Stephen L. Colby towboat moved through Lock and Dam
2, dropping its first load just south of downtown St. Paul.
This year, measurements started on Feb. 21 as the Corps survey crew used an
airboat and a global positioning system to collect the data.
Here is a video showing that process of how and where the Corps measures ice
thickness on Pepin: https://goo.gl/Hg15Md
The last measurement on Lake Pepin showed ice was thinner in some places and
thicker in other places, according to the Corps.
Here is the Corps measurements from 2009 through March 14:
https://goo.gl/uQPYSe
The shipping season-opener for the mid-Mississippi River began as of Friday,
March 9, 2018, when, "pursuant to the National Grain and Feed (NGFA) Trade
Rules," NGFA declared that the Mid-Mississippi River opened for navigation.
NGFA Barge Freight Trading Rule 18(J) states as follows: "The Dubuque and
South (mid-Mississippi) opening commences the first 07:00 hours of the first
business day after the first empty dry cargo covered barge suitable for
loading, originating at or below Winfield, Missouri, reaches Dubuque, Iowa. The
mid-Miss opening shall be determined by a majority vote of a three-person
committee appointed by the NGFA Chairman and shall be announced by publishing
the committee's confirmation of the opening on the NGFA web site."
As set forth in the rule, the Mid-Mississippi River was officially opened as
of 7 a.m. on Friday, March 9, 2018, after the MV Jerry Jarrett reached Dubuque
at 4:15 a.m. on Thursday, March 8, with at least one empty dry cargo covered
barge suitable for loading.
A dried distillers grains with solubles trader told me that barges have
started to load in the Dubuque, Iowa, corridor and also in Winona, Minnesota.
For the week ending March 13, barge freight rates were higher in the
Mid-Mississippi River corridor, signaling shippers are buying freight to move
in place to load now that the river has opened for business there.
Rates for the UMR for the week of March 25 are quoted at 575% to 600% of
tariff. However, freight brokers have noted that bids are hard to find as many
shippers are staying on the sidelines without new grain movement.
For now, river terminals in the UMR continue to look forward to that first
barge of the shipping season, much like baseball fans look forward to the first
pitch of their team's home opener.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DDG Prices Firm
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $153 for the week ended March 15, up
1 cent on average versus a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended March 15 was at 110.77%, and the value of DDG relative
to soybean meal was at 41.24%. The cost per unit of protein for DDG was $5.67,
compared to the cost per unit of protein for soybean meal at $7.81. Prices have
remained firm even while soymeal has moved lower. DDG still has a per-protein
unit cost advantage to soymeal.
The U.S. Grains Council (USGC) said in its weekly price update that
exporters asking prices for DDGS are higher this week, which has foreign buyers
mostly "kicking the tires," according to U.S. merchandisers.
"Some sales to Southeast Asia has been completed, but only with modest
volume," noted USGC. "Traded prices (CIF Southeast Asia) for April shipments
are steady this week, averaging $232 per metric ton (mt), while prices for
May/June are $2/mt higher. Prices for product destined for Myanmar and
Bangladesh had the highest increase this week, rising $4 and $6/mt,
respectively, for May shipment."
Barge CIF New Orleans, Louisiana, (NOLA) and FOB NOLA DDGS values are higher
this week as the recent logistics issues clear. Both prices are $4/mt higher
while rail-delivered Pacific Northwest prices fell an equal amount. A
merchandiser told DTN that barge loadings are picking up as the lower Upper
Mississippi River (UMR) has opened for the 2018 shipping season. Barges are
still unable to move to the upper portion of the UMR, as Lake Pepin still has
too deep of ice in the middle of the lake. Once it melts, barges can then make
their way up to the Twin Cities shipping district.
CURRENT CURRENT CHANGE
COMPANY STATE 3/15/2018 3/8/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $160 $160 $0
Indiana Dry $160 $160 $0
Iowa Dry $150 $145 $5
Michigan Dry $160 $160 $0
Minnesota Dry $150 $145 $5
North Dakota Dry $155 $155 $0
New York Dry $170 $170 $0
South Dakota Dry $150 $145 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $150 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $165 $0
Iowa Dry $145 $142 $3
Michigan Dry $165 $170 -$5
Minnesota Dry $145 $142 $3
Missouri Dry $160 $160 $0
Ohio Dry $165 $165 $0
South Dakota Dry $145 $145 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $160 $158 $2
Wet $50 $45 $5
Illinois Dry $170 $165 $5
Nebraska Dry $160 $158 $2
Wet $50 $45 $5
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $160 $160 $0
Indiana Dry $155 $155 $0
Iowa Dry $145 $145 $0
Michigan Dry $150 $150 $0
Minnesota Dry $145 $145 $0
Nebraska Dry $150 $150 $0
New York Dry $165 $165 $0
North Dakota Dry $155 $155 $0
Ohio Dry $155 $155 $0
South Dakota Dry $145 $145 $0
Wisconsin Dry $150 $150 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $140 $140 $0
Minnesota Dry $145 $145 $0
Nebraska Dry $145 $145 $0
Ohio Dry $145 $145 $0
South Dakota Dry $140 $140 $0
California $215 $215 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $228 $226 $2
*Prices listed per ton.
Weekly Average $153 $152 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 3/15/2018 $3.8675 $138.13
Soybean Meal 3/15/2018 $371.00
DDG Weekly Average Spot Price $153.00
DDG Value Relative to: 3/15 3/8
Corn 110.77% 110.33%
Soybean Meal 41.24% 39.93%
Cost Per Unit of Protein:
DDG $5.67 $5.63
Soybean Meal $7.81 $8.01
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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Ag-Related Truckers Get Second Reprieve from Electronic Logging Device Mandate
OMAHA (DTN) -- Truckers who haul agriculture products and livestock have
been granted another three-month reprieve from a rule mandating the
implementation of electronic logging devices.
The U.S. Department of Transportation's Federal Motor Carrier Safety
Administration on Tuesday announced "additional steps to address the unique
needs of the country's agriculture industries and provided further guidance to
assist in the effective implementation of the congressionally mandated
electronic logging device (ELD) rule without impeding commerce or safety."
This comes after the FMCSA announced on Nov. 20, 2017, that it was granting
a 90-day exemption for truckers hauling agriculture loads and livestock to
comply with the ELD mandate that went into effect Dec. 18, 2017. That exemption
was set to expire March 18, 2018.
In a news release on March 13, the FMCSA announced an additional 90-day
temporary waiver from the ELD rule for "agriculture-related transportation."
Additionally, during this time period, FMCSA noted they will publish "final
guidance on both the agricultural 150 air-mile hours-of-service exemption and
personal conveyance." FMCSA also noted it will "continue its outreach to
provide assistance to the agricultural industry and community regarding the ELD
rule."
"We continue to see strong compliance rates across the country that improve
weekly, but we are mindful of the unique work our agriculture community does
and will use the following 90 days to ensure we publish more helpful guidance
that all operators will benefit from," said FMCSA Administrator Ray Martinez.
The FMCSA noted that since December 2017, industry-wide roadside compliance
with the hours of service record-keeping requirements, including the ELD rule,
has been steadily increasing, with roadside compliance reaching a high of 96%
in the most recent available data. There are over 330 separate self-certified
devices listed on the registration list.
Secretary of Agriculture Sonny Perdue issued the following statement Tuesday
afternoon: "The ELD mandate imposes restrictions upon the agriculture industry
that lack flexibility necessary for the unique realities of hauling agriculture
commodities. If the agriculture industry had been forced to comply by the March
18 deadline, live agricultural commodities, including plants and animals, would
have been at risk of perishing before they reached their destination. The
90-day extension is critical to give DOT additional time to issue guidance on
hours-of-service and other ELD exemptions that are troubling for agriculture
haulers."
Livestock haulers are grateful for the extension.
"The U.S. pork industry is grateful to DOT Secretary [Elaine] Chao and FMCSA
Administrator Martinez for this additional waiver from the ELD rule, which
poses some serious challenges for livestock haulers and the animals in their
care," said National Pork Producers Council (NPPC) President Jim Heimerl, a
pork producer from Johnstown, Ohio. "This will provide the department and
Congress additional time to find a solution that meets the unique needs of
livestock haulers."
The National Cattlemen's Beef Association President Kevin Kester Tuesday
praised the U.S. Department of Transportation's decision to delay the
electronic logging device mandate another 90 days for agricultural haulers.
"This is obviously good news for America's cattle haulers and producers, and
it will provide more time to educate our livestock haulers on the ELDs while
the industry works on solutions to the current hours of service rules that
simply do not work for those hauling live animals."
Kester added, "We would like to thank Transportation Secretary Elaine L.
Chao and FMCSA Administrator Ray Martinez for listening to our concerns and
working with us to find a permanent, workable solution."
One important date to remember is April 1, 2018, which is when full
enforcement of the ELD mandate begins. A "soft enforcement" was in place when
the mandate went into effect on Dec. 18, 2017, but "strict enforcement" was
delayed until April 1, 2018.
According to the FMCSA, carriers who do not have an ELD when required will
be placed out of service.
"The driver will remain out-of-service for 10 hours in accordance with the
Commercial Vehicle Safety Alliance criteria. At that point, to facilitate
compliance, the driver will be allowed to travel to the next scheduled stop and
should not be dispatched again without an ELD." If the driver is dispatched
again without an ELD, the motor carrier will be subject to further enforcement
action.
For more information and on the ELD mandate, visit the FMCSA at:
http://bit.ly/1UtKIyo
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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Time Running Out for Next Food Safety Modernization Act Compliance Dates
Several national and state groups continue to educate U.S. grain facilities
about compliance with new rules for the handling, transportation and storage of
food, and animal feed, that are part of the Food Safety Modernization Act
(FSMA). Many are still working with the FDA on behalf of the ag industry to
clarify several of the new complicated rules, with National Grain and Feed
Association (NGFA) and the Minnesota Grain and Feed Association (MGFA) being
two of those groups.
The FSMA is changing the way we think about animal food safety in the feed
industry. Many in the feed and pet food industries are uncertain about what the
rule requires and how it applies to their situation.
The NGFA hosted 16 regional seminars in 12 states during 2016 and 2017 to
educate industry members on the far-reaching new feed safety rules. The
seminars were conducted in cooperation with state feed regulatory agencies, and
state and regional associations affiliated with NGFA, to help industry members
understand the changes, requirements and appropriate exemptions included in the
FSMA rules.
At a seminar during the 2018 MGFA annual convention on March 7, David
Fairfield, NGFA Sr. VP of Feed Services told a group of over 200 elevator
managers and farmers that "feed is food" is the new standard. He noted that
FSMA rules apply to facilities required to register as a "food facility" with
FDA under Bioterrorism Act requirements.
"Feed mills, grain elevators, grain processors that manufacture, pack
process or hold food for humans, or animals, must register with the FDA. You
need to understand your obligations," added Fairfield.
One of the most notable and contentious issues Fairfield pointed out, is
that pulses (dry peas, lentils, beans and chickpeas) have been categorized with
the requirements for fruits and vegetables (produce). He said that the NGFA
does not agree with placing pulses in that category and is working with the
U.S. Food and Drug Administration (FDA) to change that ahead of the compliance
date for small businesses.
In a February 8 statement submitted to the FDA, the NGFA outlined several
existing regulatory requirements that "could be changed or eliminated to reduce
regulatory burden on the grain and feed industry while still preserving FDA's
ability to fulfill its public health responsibilities."
The NGFA urged FDA to reclassify pulses from the fruits and vegetables
category and place them in to the grain category. "This reclassification is
necessary so that pulses are not subject to additional FSMA-related
requirements that are inappropriate and unnecessary to protect public health,"
the NGFA noted. Read the entire statement, which includes the other issues that
concern NGFA, here: https://goo.gl/zf7fTk
The other important issue Fairfield discussed is the FSMA rule on Sanitary
Transportation of Human and Animal Food Primary. According to the FDA,
responsibility for determining appropriate transportation operations now rests
with the shipper, who may rely on contractual agreements to assign some of
these responsibilities to other parties. Fairfield made it very clear to his
audience at the MGFA convention seminar, "If you qualify as a shipper as stated
by FDA, you are obligated to comply."
Specifically, this FSMA rule establishes requirements for vehicles and
transportation equipment, transportation operations, records, training and
waivers.
Here are some key exemptions to this rule for shippers to be aware of:
-Shippers, receivers or carriers engaged in food transportation operations
that have less than $500,000 in average annual revenue
-Transportation activities performed by a farm
-Transportation of food that is transshipped through the United States to
another country
-Transportation of food that is imported for future export and that is
neither consumed or distributed in the United States
-Transportation of compressed food gases (e.g. carbon dioxide, nitrogen or
oxygen authorized for use in food and beverage products), and food contact
substances
-Transportation of human food byproducts transported for use as animal food
without further processing
-Transportation of food that is completely enclosed by a container except a
food that requires temperature control for safety
To read more from the FDA site that addresses this rule, including recent
updates, other exemptions and waivers, visit: https://goo.gl/KTVsaJ
"The clock is ticking," concluded Fairfield.
For a spreadsheet of the dates of compliance issued by the FDA, visit:
https://goo.gl/JU6RP1
For assistance with any questions on the FSMA Rules, visit the FDA website:
https://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm459719.htm
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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DDG Prices Higher
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $152 for the week ended March 8, up 1
cent on average versus a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended March 8 was at 110.33%, and the value of DDG relative
to soybean meal was at 39.93%. The cost per unit of protein for DDG was $5.63,
compared to the cost per unit of protein for soybean meal at $8.01.
The U.S. Grains Council (USGC) said in its weekly price update that
transportation issues continue to impact the DDGS market and cause troubles
getting product from ethanol plants to export ports. "Some traders are
reporting DDGS barges should be loaded in the mid-Mississippi River this week,
but there is still uncertainty as to when these barges will arrive at the Gulf.
Barge CIF NOLA prices jumped higher three weeks ago and are holding those
levels, rising another $1/metric ton (MT) this week to $217/MT. FOB NOLA DDGS
prices are $6/MT higher this week at $228/MT, 127% of FOB NOLA corn values."
American Commercial Barge Line noted in their daily river update that high
water in the Lower Mississippi River (LMR) to the Gulf has caused tow sizes to
be reduced by two strings southbound (five to 10 barges). The river was closed
for a fleet breakaway from mile marker 845-861, but was expected to be
re-opened late in the evening on March 8. "Baton Rouge is not expected to crest
until March 21 at 42.5'. New Orleans is not expected to crest until March 13 at
17'. Daylight only southbound through Memphis (LMR 725) and Helena (LMR 661)
until the second half of March, Vicksburg (LMR 435) until the end of March, and
Baton Rouge at least through the end of March."
Merchandisers are reporting Vietnamese buyers are actively looking for
April-June shipments but, so far, are not willing to pay asking prices, added
USGC. "Some sales to South Korea have occurred but with limited volumes. So far
this week, CIF Southeast Asia prices are up $4/MT to $270 with prices for Japan
and Shanghai, China leading the way (each up $10/MT)."
CURRENT CURRENT CHANGE
COMPANY STATE 3/8/2018 3/1/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $160 $155 $5
Indiana Dry $160 $160 $0
Iowa Dry $145 $145 $0
Michigan Dry $160 $160 $0
Minnesota Dry $145 $145 $0
North Dakota Dry $155 $155 $0
New York Dry $170 $165 $5
South Dakota Dry $145 $145 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $165 $0
Iowa Dry $142 $142 $0
Michigan Dry $170 $170 $0
Minnesota Dry $142 $142 $0
Missouri Dry $160 $160 $0
Ohio Dry $165 $165 $0
South Dakota Dry $145 $145 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $158 $150 $8
Wet $45 $50 -$5
Illinois Dry $165 $168 -$3
Nebraska Dry $158 $150 $8
Wet $45 $50 -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $160 $155 $5
Indiana Dry $155 $155 $0
Iowa Dry $145 $140 $5
Michigan Dry $150 $150 $0
Minnesota Dry $145 $145 $0
Nebraska Dry $150 $145 $5
New York Dry $165 $165 $0
North Dakota Dry $155 $150 $5
Ohio Dry $155 $155 $0
South Dakota Dry $145 $145 $0
Wisconsin Dry $150 $145 $5
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $140 $140 $0
Minnesota Dry $145 $145 $0
Nebraska Dry $145 $145 $0
Ohio Dry $145 $145 $0
South Dakota Dry $140 $140 $0
California $215 $215 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $226 $216 $10
*Prices listed per ton.
Weekly Average $152 $151 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 3/9/2018 $3.8300 $136.79
Soybean Meal 3/9/2018 $371.70
DDG Weekly Average Spot Price $152.00
DDG Value Relative to: 3/8 3/2
Corn 110.33% 111.63%
Soybean Meal 39.93% 38.32%
Cost Per Unit of Protein:
DDG $5.63 $5.59
Soybean Meal $8.01 $8.29
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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High Water Still Stalling Barge Traffic
Heavy rainfall, from the middle to lower Mississippi River Valley eastward
across much of the Ohio River Basin, resulted in widespread river flooding
along Cincinnati, Cairo, Memphis and other locations, according to the USDA
weekly Grain Transportation report. High water has caused navigation
disruptions on sections of the Ohio, Illinois, Tennessee and Arkansas Rivers.
The Ohio River has dropped below the flood stage of 52 feet, and as of March
4 was at 46.59 feet. The National Weather Service is predicting the water will
continue to recede over the next few days after water levels rose along
Cincinnati's riverfront to 64.7 feet, the highest point since 1997.
Early in the week on Feb. 27, the CME issued a second Force Majeure, this
time on the Ohio River: "CBOT is hereby declaring a condition of Force Majeure
due to load-out impossibility at a majority of (SRW) wheat regular shipping
stations on the Ohio River unable to load due to high water levels and/or
flooding." The first Force Majeure was issued on Feb. 22 at a majority of corn
regular shipping stations on the Illinois River.
On March 2, American Commercial Barge Line (ACBL) noted in its daily river
update that many fleets and docks shut down along the Ohio River (OR), while
elsewhere, slow transits were expected throughout the river. "Do not expect
returning to normal conditions for at least 2-to-3 weeks," ACBL added.
ACBL also noted that Markland Lock (OR mile marker (MM)531) and McAlpine
Lock (OR MM607) have resumed locking after the river fell below flood stage
there. "Smithland Lock (OR MM918) suspended locking on Feb. 26 and is not
expected to be back up until March 11-13. JT Myers Lock (OR MM846) had
suspended locking, but boats are running the pass March 2 with a 12-barge
restriction. This is expected to last until March 10. Cairo is expected to
crest at 55 feet on March 3, at 50 feet; taller boats will have bridge
clearance issues for until the middle of March."
"On the Illinois River (IR), meanwhile, heavy rain over the past two weeks
and melting of the snowpack in Northern Illinois has resulted in widespread
flooding that has extended downstream to the lower Illinois River basin,"
hydrologist Mark Fuchs at the Nation Weather Service (NWS) St. Louis forecast
office reported.
ACBL reported on March 2 that flows are still too high to transit through
Starved Rock Lock (IR MM231) and Marseilles Lock (IR MM245), meaning nothing
was moving through there as of Friday. Expectations are that tows may be able
to transit through the two locks between March 5 and March 6.
On the Arkansas River, there is still limited movement with reduced tow
sizes (six barges) below Van Buren (AK MM298) until the first half of next
week, noted ACBL. On the Tennessee River, slow transits with reduced tow sizes
are expected until the middle of this week. Chickamauga Lock (TR MM471) has
reopened and is only operating during daylight hours, according to ACBL.
The large volumes of water from the aforementioned rivers are flowing into
the Mississippi River, causing its lower portion to reach flood stage at
multiple locations, noted USDA.
In the Lower Mississippi River (LMR) down to the Gulf, high water has
resulted in reduced tow sizes, both north and southbound. "In most cases, tows
have been reduced by two strings southbound (five-to-10 barges) with
expectations this will continue for the near future. Transits are only allowed
during the daylight through Memphis (LMR MM725) until second half of March, and
Vicksburg (LMR MM435) until the end of March," noted ACBL.
At the Gulf, Baton Rouge harbor is not expected to crest until March 21 at
42.5 feet, while New Orleans is not expected to crest until March 13 at 17
feet. Tom Russell of Russell Marine Group told DTN that, "High water levels at
Baton Rouge and New Orleans harbors will likely remain through April, and will
certainly strain logistics and loading operations. Safety measures will create
slowdowns and likely extra port costs during this period."
The NWS Climate Prediction Center's updated long-range forecast for the
month of March shows a fairly good risk of above-average precipitation for the
entire state of Minnesota and an above-average risk in Missouri and Illinois as
well, according to Fuchs. "That is something to keep an eye on, especially in
Minnesota. If they get well above-average precipitation, that's got to come
south."
That means we may not have seen the last of flooding if the precipitation
forecast comes true. Should flooding continue into spring, it would slow barges
up and down the rivers, but also it could also hamper spring fieldwork and
planting in some areas.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************
DDG Prices Higher
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $151 for the week ended March 1, up 3
cents on average versus a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended March 1 was at 111.63%, and the value of DDG relative
to soybean meal was at 38.32%. The cost per unit of protein for DDG was $5.59,
compared to the cost per unit of protein for soybean meal at $8.29.
Merchandisers noted that the strength in domestic prices can be attributed
to the continued rise in soybean meal price. This has been a boost for DDG
prices as the cost per unit of protein for DDG remains a better value for
feeders. Some buyers have turned their nose up at the high cost of DDG, but for
the most part, demand remains strong and DDG still has a prominent place in
feed inclusion rates.
Barge CIF NOLA (New Orleans, Louisiana) prices were firm as river conditions
due to flooding in the Lower Mississippi River have not improved. American
Commercial Barge Line noted in their daily river update on March 1 that high
water has resulted in reduced tow sizes north- and south-bound and currently
only daylight passage is allowed through Memphis and Vicksburg for at least the
next few weeks. At the Gulf, Baton Rouge harbor is not expected to crest until
3/21 at 42.5 feet, and New Orleans is not expected to crest until 3/13 at 17
feet. Safety protocols are in place and loadings have been affected by the high
water.
The U.S. Grains Council (USGC) said in its weekly price update that year-end
data for 2017 revealed U.S. exports of approximately 11 million metric tons to
over 50 countries. "Exports in January 2018 were up substantially compared to
January 2017, continuing a trend of increasing exports that began in December
2017. Lately, merchandisers report a flurry of interest from especially Asian
buyers starting late last week and continuing this week. As such, prices for
Asian destinations have firmed up; on average DDGS destined for Southeast Asia
increased $6 per metric ton this week from last. Containers to Thailand led the
way, up $8."
CURRENT PREVIOUS CHANGE
COMPANY STATE 3/1/2018 2/22/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $155 $150 $5
Indiana Dry $160 $155 $5
Iowa Dry $145 $140 $5
Michigan Dry $160 $160 $0
Minnesota Dry $145 $140 $5
North Dakota Dry $155 $150 $5
New York Dry $165 $165 $0
South Dakota Dry $145 $140 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $155 -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $165 $0
Iowa Dry $142 $142 $0
Michigan Dry $170 $170 $0
Minnesota Dry $142 $140 $2
Missouri Dry $160 $160 $0
Ohio Dry $165 $165 $0
South Dakota Dry $145 $140 $5
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $50 $50 $0
Illinois Dry $168 $155 $13
Nebraska Dry $150 $150 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $155 $150 $5
Indiana Dry $155 $145 $10
Iowa Dry $140 $140 $0
Michigan Dry $150 $150 $0
Minnesota Dry $145 $135 $10
Nebraska Dry $145 $145 $0
New York Dry $165 $165 $0
North Dakota Dry $150 $150 $0
Ohio Dry $155 $150 $5
South Dakota Dry $145 $140 $5
Wisconsin Dry $145 $140 $5
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $140 $135 $5
Minnesota Dry $145 $135 $10
Nebraska Dry $145 $150 -$5
Ohio Dry $145 $145 $0
South Dakota Dry $140 $138 $2
California $215 $215 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $216 $218 -$2
*Prices listed per ton.
Weekly Average $151 $148 $3
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 3/1/2018 $3.7875 $135.27
Soybean Meal 3/1/2018 $394.00
DDG Weekly Average Spot Price $151.00
DDG Value Relative to: 3/2 2/22
Corn 111.63% 112.99%
Soybean Meal 38.32% 39.26%
Cost Per Unit of Protein:
DDG $5.59 $5.48
Soybean Meal $8.29 $7.93
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
Flooding Halts Shipping on Illinois River, Creates Havoc on Mississippi
Just over one week ago, water levels on the Illinois River and Upper
Mississippi, between St Louis and Cairo, Illinois remained low, but the
forecast for rains at that time were expected to "improve" that situation. What
followed was more than a month's worth of rain falling on some locations in the
central U.S. in less than 48 hours, from Feb. 19-21, according to Accuweather.
On Feb. 21, the U.S. Army Corps of Engineers, Rock Island District released
this statement: "Due to high water on the Illinois Waterway, the T.J. O'Brien,
Dresden Island, Marseilles and Starved Rock locks have closed to navigation and
will remain closed until water levels drop and safe operations can resume.
Then, on Feb. 22, the CME released a statement saying, "Effective
immediately and until further notice, CBOT is hereby declaring a condition of
Force Majeure due to load-out impossibility at a majority of Corn regular
shipping stations on the Illinois River." Here is a link to the full
announcement: https://goo.gl/8dHJQH
As the current trading month of March nears first notice day, Feb. 28 and
first delivery day, March 1, the Force Majeure basically alleviates any
penalties that would incur at a delivery facility on the Illinois River that is
unable to perform because the river is closed. A river/lock closure stops
barges from moving up or down river and for all practical purposes, stops all
commerce until conditions improve.
The CIF NOLA basis for corn has been strong all week as exporters at the
Gulf of Mexico need to fill waiting vessels for export. The MGEX barge trading
rules explains the term "CIF NOLA" used in barge contracts: "FOB means free of
charges on board barge or vessel. The terms CIF or "delivered," followed by a
destination point, shall mean FOB origin, but the price includes the cost of
the cargo FOB origin point, plus cargo insurance, plus barge or vessel freight
to the destination rate point." In this case, the destination is NOLA, which
means New Orleans, Louisiana.
Barge freight has been stronger, and Ceres Barge Line noted in its freight
report Feb. 23 that, "Markets were up again yesterday afternoon and again this
morning as shippers continue to search for barges." Freight has increased, not
just for nearby, but into April as well. The longer the rivers remain in flood
stage, the longer it will take to get empty barges up river to be loaded out
for contract obligations at the Gulf.
Kent Hamm, buyer for the DeLong Company in Minooka, Illinois, told DTN on
Feb. 22 that basis in his area had remained steady so far, even with all the
high water. He also said his electrician was busy working at the Illinois River
houses, disconnecting electric motor and other equipment for removal ahead of
the flooding. "An electric motor that gets submerged is junk once water
recedes," added Hamm.
The Ohio River is under siege once again from high water. American
Commercial Barge Line (ACBL) noted in its river update Feb. 22 that, "Many
fleets and docks are shut down up and down the river. Slow transits are
expected throughout the river and an additional 2 to 6 inches of rainfall is in
the forecast, which will cause the river levels to continue to rise. Do not
expect returning to normal conditions for at least two-to-three weeks.
"We are beginning to see bridge clearance issues in Cincinnati, and the
river is not expected to crest for another seven-to-10 days," added ACBL.
"River levels in Cincinnati are expected to approach 60 feet, which will be
around the 20th highest in history."
Over the weekend, The Weather Channel reported that, "Floodwaters on the
Ohio River in Cincinnati rose above 60 feet (moderate flood stage) Sunday
morning for the first time since 1997. The Ohio River (McAlpine Upper gauge) in
Louisville, Kentucky, rose to its tenth-highest level on record Sunday and its
highest level in about 20 years. Records at that gauge date back to the late
1800s."
On the Mississippi River at St. Louis Harbor to Cairo, water levels were
high as of Friday, but were not expected to reach flood stage. However, in the
Lower Mississippi River (LMR) from Cairo to New Orleans, the picture is much
different, due in part to the high flows off the Ohio River.
ACBL noted that in the LMR, "High water has resulted in reduced tow sizes NB
and SB. In most cases, tows have been reduced by two strings SB (five-to-10
barges) and we expect this to continue for the foreseeable future."
Tom Russell, of Russell Marine Group, said that, "On top of the flooding,
the river has been experiencing unrelenting fog due to record warmth over the
past two weeks. Temps have been running as much as 30 degrees (Fahrenheit)
above average in some areas. Warm temps will continue, which means likelihood
of fog will continue slowing barge movements.
"New Orleans and Baton Rouge Harbors have seen unprecedented nightly fog
over the past two-to-three weeks, which has caused logistical delays, stoppages
and back-ups," said Russell. "Warm moist weather will continue during the
upcoming weeks, which means fog could continue to be an issue. Barge deliveries
in the Port are behind schedule due to fog."
River levels in the Harbor are on the rise and by next week could reach
levels where some safety restrictions will start to be implemented, added
Russell. "The river will continue to rise and by mid-March reach an estimated
level of 14 feet, which will slow logistics, barge movements and vessel
movements considerably."
The problems on the rivers are likely to not end anytime soon as more rain
is expected in the coming days. On top of that, we will start to see a "spring
melt" from the Upper Mississippi River this week. As snow melt moves south, it
will add to the already swollen rivers.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************
DDG Prices Steady
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $148 for the week ended Feb. 22,
unchanged on average versus a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Feb. 22 was at 112.99%, and the value of DDG relative
to soybean meal was at 39.26%. The cost per unit of protein for DDG was $5.48,
compared to the cost per unit of protein for soybean meal at $7.93.
Merchandisers noted that domestic prices were mixed, but overall remain
firm, especially given the high prices seen for soymeal. On a per unit of
protein value, DDG is still cheaper than soymeal.
As the weather warms up, we may see a seasonal slowdown in demand, but for
now, the market remains steady. The Asian market was quiet last week during the
Chinese New Year and Tet holiday in Vietnam, but buyers are slowly returning.
The U.S. Grains Council (USGC) said in its weekly price update that
merchandisers reported increased interest this week from Asian markets,
including Indonesia and Vietnam. Prices for 40-foot containers to Indonesia
(Jakarta) and Vietnam (HCMC) are up modestly this week from last, and on
average, DDGS destined for Southeast Asia increased $2 per metric ton (mt) this
week.
Barge CIF NOLA (New Orleans, Louisiana) prices are $8/mt higher this week,
while FOB (free on board -- the buyer pays for transportation of the goods)
Gulf DDGS values are also up $7/mt. High water has resulted in reduced tow
sizes north- and south-bound on the Lower Mississippi River to the Gulf, with
expectations this will continue for the foreseeable future. Baton Rouge is not
expected to crest until the middle of March around 40 feet. New Orleans is not
expected to crest until the second half of March at around 15 feet.
The conditions on the Ohio and Illinois rivers are horrible, as flooding has
shut down all barge movements. The American Commercial Barge Line noted in its
Thursday update that Dresden Lock (IR 271), Marseilles Lock (IR 245), and
Starved Rock Lock (IR 231) are all currently closed and are not expected to
resume operations through this area until at least March 2. In response, the
CBOT declared force majeure due to load-out impossibility at a majority of corn
regular shipping stations on the Illinois River because of high water levels
and/or flooding.
CURRENT PRIOR WEEK CHANGE
COMPANY STATE 2/22/2018 2/14/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $150 $0
Indiana Dry $155 $150 $5
Iowa Dry $140 $140 $0
Michigan Dry $160 $160 $0
Minnesota Dry $140 $135 $5
North Dakota Dry $150 $148 $2
New York Dry $165 $165 $0
South Dakota Dry $140 $145 -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $155 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $165 $0
Iowa Dry $142 $138 $4
Michigan Dry $170 $170 $0
Minnesota Dry $140 $138 $2
Missouri Dry $160 $160 $0
Ohio Dry $165 $165 $0
South Dakota Dry $140 $140 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $50 $50 $0
Illinois Dry $155 $155 $0
Nebraska Dry $150 $150 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $150 $0
Indiana Dry $145 $145 $0
Iowa Dry $140 $140 $0
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $145 $145 $0
New York Dry $165 $165 $0
North Dakota Dry $150 $150 $0
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
Ohio Dry $145 $145 $0
South Dakota Dry $138 $138 $0
California $215 $207 $8
Western Milling, Goshen, California (559-302-1074)
California Dry $218 $210 $8
*Prices listed per ton.
Weekly Average $148 $148 $0
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 2/22/2018 $3.6675 $130.98
Soybean Meal 2/22/2018 $376.90
DDG Weekly Average Spot Price $148.00
DDG Value Relative to: 2/22 2/15
Corn 112.99% 112.68%
Soybean Meal 39.26% 39.60%
Cost Per Unit of Protein:
DDG $5.48 $5.48
Soybean Meal $7.93 $7.87
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DDG Prices Remain Firm on Average
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $148 for the week ended Feb. 15, $1
stronger on average than a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Feb. 15 was at 112.68%, and the value of DDG relative
to soybean meal was at 39.60%. The cost per unit of protein for DDG was $5.48,
compared to the cost per unit of protein for soybean meal at $7.87. The surge
in soymeal prices the past week has kept DDG as a good value in rations.
Domestic prices were mixed, but a few states where supplies are tight saw an
increase in values. The Energy Information Administration (EIA) report
Wednesday showed that ethanol production for the week ending Feb. 9 was the
lowest production number since the start of the year, adding to the tight
supply of DDG for some plants. Merchandisers noted that prices at the Texas
border remain strong, indicating continued demand form Mexico.
The U.S. Grains Council (USGC) said in its weekly price update that barge
CIF NOLA prices are $8/metric ton (MT) higher this week while FOB Gulf DDGs
values are up $9/MT. "Merchandisers are reporting Asian buyers are showing only
light interest at current prices, waiting for prices to moderate somewhat.
However, prices for 40-foot containers to Southeast Asia increased $6/MT this
week with prices to Shanghai leading the way (up $9/MT). On average, DDGS
destined for Southeast Asia increased $4/MT this week."
CURRENT CURRENT CHANGE
COMPANY STATE 2/14/2018 2/8/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $150 $0
Indiana Dry $150 $150 $0
Iowa Dry $140 $145 -$5
Michigan Dry $160 $160 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $148 $148 $0
New York Dry $165 $165 $0
South Dakota Dry $145 $145 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $155 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $160 $5
Iowa Dry $138 $138 $0
Michigan Dry $170 $165 $5
Minnesota Dry $138 $138 $0
Missouri Dry $160 $160 $0
Ohio Dry $165 $160 $5
South Dakota Dry $140 $140 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $50 $50 $0
Illinois Dry $155 $155 $0
Nebraska Dry $150 $150 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $145 $5
Indiana Dry $145 $145 $0
Iowa Dry $140 $140 $0
Michigan Dry $150 $140 $10
Minnesota Dry $135 $135 $0
Nebraska Dry $145 $150 -$5
New York Dry $165 $165 $0
North Dakota Dry $150 $150 $0
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
Ohio Dry $145 $145 $0
South Dakota Dry $138 $128 $10
California $207 $197 $10
Western Milling, Goshen, California (559-302-1074)
California Dry $210 $210 $0
*Prices listed per ton.
Weekly Average $148 $147 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 2/15/2018 $3.6775 $131.34
Soybean Meal 2/15/2018 $373.70
DDG Weekly Average Spot Price $148.00
DDG Value Relative to: 2/15 2/8
Corn 112.68% 112.53%
Soybean Meal 39.60% 43.02%
Cost Per Unit of Protein:
DDG $5.48 $5.44
Soybean Meal $7.87 $7.19
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************

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